[RTC List] local hosts - Why are we held hostage?

[Larry Goldberg]

I would like to reply to a couple of the ideas recently posted having  
to do with local hosting, peering and fiber access.  Having a little  
experience in this matter (most of you know my background so I won't  
bore you) I've watched these issues kick around here for many  
years.    I agree with William Van Hefner on one important point: for  
the cost of the past studies (e.g. RCC study at $500k which has taken  
the better part of a year to complete with little new knowledge  
gained) we could have solved most of the problems we've been talking  
about regarding redundancy, local peering and last-mile rural access.   
Over the past year I've been working with a group of other local IT  
professionals to address some of these issues with a private-sector  
solution. We developed a business plan which we've discussed with  
several RTC members privately and have researched many of the issues  
discussed in this list and in the public forums (Times-Standard,  
public meetings, etc...)  Suffice to say, that at the point of capital  
development to launch such a project this past Summer, we had to  
shelve our plans for the time being given the Wall St. meltdown,  
seizing of credit markets and lack of sufficient local capital.  It  
could still be done, but won't be anytime soon given the current  
economy.

Here are a few of my personal findings:

1) The need for a second fiber line is unrealistic and probably not  
necessary.  There are only a handful of companies (notably SuddenLink,  
Verizon and several other "big boys") who really need additional  
bandwidth.  While the area's need for bandwidth is growing, there  
isn't a reliable business case to make for the expenditure required  
(probably >$5 million).  Yes, everyone WANTS more bandwidth, but most  
people are not prepared to pay a nickel more for it.  The RCC study,  
if you believe their results (which I don't), basically comes to the  
conclusion that the vast majority of users (commercial and  
residential) are simply unwilling to pay more the $50/mo. for high  
bandwidth services.  It is a very slim minority who are willing (or  
able) to pay over $75/mo.  The commercial market in this area is very  
similar to a residential market - there are too few "heavy users" to  
justify the business case for the investment required to provide  
additional "alternate/redundant" paths.

2) For YEARS this area was able to exist on microwave transmissions.   
I ran my initial company, Northcoast Internet, completely on Pacific  
Bell's service which was exclusively based on microwave links.  Yes,  
it had disruptions periodically, but if used in combination with  
existing fiber, as available today, it would be sufficient to provide  
redundancy.  With multiple microwave paths (e.g. north to Crescent  
City and east to Redding) there would likely be ample redundancy to  
handle virtually any disruption from any one link (including the  
fiber). With microwave technology (a well established and reliable  
technology) it would cost a FRACTION of fiber and yet provide plenty  
of bandwidth (it's possible to get up to 1 Gb microwave, so it's  
highly scalable) and it avoids most of the pitfalls of fiber in an  
area like this (rights-of-way, environmental impacts, earthquake  
vulnerability, etc...)

3) There are currently viable alternate paths ("redundancy") which  
exist and are locally supported.  101 NetLink is a local company (out  
of Garberville) which offers an independent (non-AT&T) microwave link  
to the Internet via Ukiah.  Seth has spoken to our group several times  
and his technology is stable and proven.  He currently serves "last- 
mile" folks in the S. Humboldt hills and now has moved up to the  
Humboldt  Bay area and is providing service in Eureka and Fortuna and  
parts of Arcata.  If you are truly concerned about supporting a local  
business and getting non-AT&T service, check out 101 NetLink.  As much  
as I believe we could form another wireless provider to offer  
additional services, Seth is doing a fine job within his market and  
he's a local guy we should support.

4) For all the talk about the fact that "our community leaders are out  
of touch" we're going to need to realize several things:
   a) Local leaders are not technically oriented, but they'll come  
around when they understand the nature of the problem and the solution  
if it's well presented and backed up with facts.  A good example is  
how we organized this area (primarily with Tina's dedicated help) to  
get the fiber impasse straighten out when SBC and CalTrans got into a  
pissing contest which hung up our fiber line.  We have it now, thanks  
to the efforts of many community leaders (including the RTC), and have  
barely tapped the bandwidth to date.  It's hard to make a case for a  
second fiber when we haven't tapped out the existing fiber yet.

   b) AT&T wants to milk the revenue for as long as possible to pay  
off their investment, so I doubt they'll fund a second fiber cable.   
Local leaders can do little more than beg for service and probably the  
most effective action they can take is what they're doing now by  
organizing a lobbying effort with the California Emerging Technology  
Fund for leveraging state money with CETF funds to encourage more  
competition and get broadband to the "last mile".  They're working  
with the CPUC and some results may eventually come of their efforts,  
but don't hold your breath.

   c) Much of the problem is NOT with the last mile but with the  
'middle mile" in fact.  In searching for affordable wholesale  
bandwidth, we found that it's a very difficult proposition to find  
bandwidth at an affordable rate.  The key is to own a separate network  
(e.g. 101 NetLink) and negotiate with 3rd party providers in places  
like Ukiah or Redding.  Local leaders don't get this and in reality  
probably can't do anything about it.

  d) Given the current state of the economy, we're all going to be  
luck to just hang onto what we currently have.  The state is broke and  
while new infrastructure money may be coming from the Obama white  
house, it's not going to happen overnight and it won't necessarily  
flow to this area.  We need to be realistic about what we can  
accomplish and focus on a single, realistic goal.

5) There is a lot on the horizon which could impact many of these  
discussions.  There are companies like the one I mentioned several  
weeks ago - Open Range - which aren't even on the radar yet who are  
planning major moves in providing broadband to rural areas (Open Range  
is talking about a WiMax terrestrial distribution network utilizing a  
satellite-based backbone).  I don't know whether these kinds of  
companies are for real, but, as with Clearwire, they have major  
backing and with the stroke of a pen, they could commit millions to  
the effort without even checking in with us.  As Gregg Foster spoke at  
the last broadband conference, there is a company now negotiating to  
build a new fiber line over PG&E's right-of-way on Hwy 36) - all in  
"stealth mode" which is opaque to the public.  I'm not in favor of  
this approach, but it's the reality today in this marketplace.   
Technology is changing too fast to be able to predict the future, but  
suffice to say, it's probably not going to be what we expect.

6) The lack of local investment money is a real challenge to  
developing local solutions.  I've raised considerable capital in the  
past, so I have first-hand experience in what it takes to raise money  
up here.  Until recently (!), investors wanted a rate of return  
commensurate with Wall St.  Any project which can be built locally  
simply cannot compete with other investments on Wall St.  This may be  
changing due to the reality which has been exposed in the national  
economic meltdown, but I challenge any of you to raise the funds  
necessary to develop a competing service.  Yes, it can probably be  
done, but it's takes someone (some group) to do it.  For all the talk,  
it's a real challenge to pull it off (and I know having built and sold  
three IT companies in this area).  Yes, it would have been far better  
for the $500k from the HSU RCC study to have simply built the project,  
but it won't happen.

Don't expect someone else to do it - if you think there is a business  
case, do it yourself.  Seth at 101 NetLink has done it and to his  
credit he's survived this long, but I'm sure he has battle scars to  
show if you asked him.  It's tough providing an independent Internet  
service and there are plenty of good reasons why others haven't done  
it, despite the logic of why it would be such a good idea.  I share  
many of your frustrations, but have learned to "break my truth on the  
rock of reality."  We are nowhere close to where we want to be, but  
we're a whole lot further along than we used to be!  Count your  
blessings and roll up your sleeves to work towards a better future.